EN | Building the Next Generation of Trust How Institutions and Retail Investors Grow Tog | MERGE SP

uh building the next generation of trust how institutions and retail investors grow together. Uh welcome to the stage Leonardo hubstein journalist at journal web. Thank you Leonardo. So you can introduce the other speakers.

Thank you. So hello everyone. H good afternoon. uh we are talking about here about uh bringing trust from retail in the crypto market and traditional market to the uh to to to the institutional to our markets and for that I'll call here now on stage Veronica from uh crypto finance Victor Rugu from BV Bank and Maria Fernanda uh from the ministry of justice and we shall start our our panel our chat. So thank you so much for coming.

Thank you for watching and uh in this panel we are going to talk about the trust from uh the market right how to gain this this kind of trust because I I heard a lot in this market a word that I I I did I do not agree with with it h it's trustless cuz to be a trustless company you have to gain so much trust before uh beh actually thirstless right so I'd like first to sorry I have my keynotes here

h so actually I'm going to start with uh Maria Fernanda h I'd like to know again thank you for being here I'd like to know uh as a investigator how do the the scams or or these kinds of h crimes on crypto market can uh could uh mine the the trust of the crypto market and what kinds of of uh crimes do you have seen the most in nowadays?

Okay. Okay. I'm glad to be here and um about your question. I've been working for about 12 years as police officer and in the last four years I've been at ministry of justice

and during these days I have seen a lot of crimes with crypto assets involving u exploitation of human v vulnerabilities normally are crimes normally the the biggest crimes involving scams and These kind of crimes are the principle who affected the truth in the market. Uh I was thinking about this conversation and I remember last year we we have a kind of hack attack was huge hack attack and uh the criminals stolen a lot of money but this attack started with a fishing attack. So even when the vulnerability exploited is technical even in this cases there's a human involved. So yeah to me in my my field normally what I have seen is it's this kind of crimes when the people uh make mistakes or they are lead to mistakes to make mistakes. there are scams involving uh fake investments or romance scams or sometimes are inside job.

So I had a case where um I'm employed from a huge institution stolen some money and put in cryptocurrency using fake using fake documents. And when I started to look this case, seems like the the the business was doing themsel uh sending his money their money through crypto but was not was the criminal. So always normally are someone behind this. M it's curious that cuz uh normally when someone uh tell tell me that uh is isn't in in this market cuz uh uh he sees uh a lot of hacks a lot of of scams h in the most of time it's social engineering like right so isn't the technology itself that uh bring that kind of uh that kind of mistake of that kind of that kind of fraud. Uh it's interesting to know and uh Victor I'd like to know uh now what is the importance what is is the the the main goal with institutional to to to to have this that kind of trust of the market.

So uh what means to to instit in institutionals like busy bank to to have the that trust?

Perfect. So first of all I'm with my little clue here. So I'm sorry for this and for the rest English but I do my best here. Uh my name is Victor. I work in the bank as a strategy and innovation coordinator.

Basically I'm in the interface from uh from business and product teams with technology to provide uh tools uh practices approaches uh so we can guarantee uh a fast uh learning and the validation of new technologies and innovation uh through all the areas of the bank for the ones who doesn't know it uh it's a a very strong and solid bank here in Brazil. It's a very no bank about uh it's uh vehicle financing. So we are leader of this market for more than 13 years if I'm not wrong. Uh but we have also another product uh based on credit for uh retail wholesale and also we have a a digital account yeah for our clients. And regarding the trust that is the main point of our panel today.

Uh well banks are totally dependent on trust. So we sell trust with the money with the operations. Uh and we have a a rice and beans. Yeah. The au for Brazilians here that is the compliance uh risk management the governance of this risk.

Uh but when we are talking about uh uh innovation, yeah, when we are talking about the use of digital assets for example, we're talking about also to give trust through uh new solutions, new digital products. So uh I think that uh uh we have to make a a balance between the solidity of the innovation sorry the solidity of this uh structure of giving trust through governance risk management and this kind of things but also uh bringing innovation to the table you know to provide more ways of trust through it. So it's a a very uh important pillar for any service any financial services uh here in Brazil and worldwide. So in short digital assets do not replace this uh uh institutional trust you have to in my opinion uh they just the digital assets just enhance the way you give trust through your solutions services for your clients.

Mhm. Nice. And uh finally, Veronica, uh do you think that we have uh we are at a point in the crypto market that we cannot uh cannot make mistakes anymore and we have to go through the the the the perception of the trust and gain this the that trust or we are h we are h in a stage of we we we can bring uh in parts you know we can uh make some mistakes and and discover this discover that and and reformulate the the whole what do you think about that?

Yes. So it's actually very good question because as you can you could see at the beginning when crypto blockchain was a new technology there were so many different players that came into the market and you could also see all the alternative cryptocurrencies. It was I think very hard for banks to really trust this market and to really step into it. Um but now we can see that crypto is not anymore just an isolated digital technology that is only for special kind of group reserve but it is um it is it is everywhere. So it's the retail people are using it stable coins it's part of the everyday life and um it's also on the agenda of the regulators.

So we could here just speak to many people and everybody is mentioning yeah the Brazilian central bank they are looking at it. Um there is also the regulations coming out. So with that this is this whole market is moving into a new more mature phase where as you say there is just no more room for mistakes. the the failures there is uh there you cannot really allow yourself because you are losing then the trust of the clients that the banks have and we are a regulated custodian so it's also for us very important that we can enable the banks to give this trust to their clients

perfect aren't aren't built by h by beginners anymore right we're we're not on the playground ground.

It's actually a very good point that you're saying because I was thinking before that moving from sorry to say that from the crypto bros who are build who were building it now we are into people who are really professional and providing professional service it's it's a completely different playing field now

so now we have an idea uh of what's the importance of bringing this trust and now I'd like to discuss how do you like that. Right. So uh first I'd like to ask to Maria what partnerships between police exchange and and other uh institutionals uh can uh what what what partnerships can can can be build that that kind of trust and and how come

okay I think in this moment where we are I think the market is looking for trust to growth and uh in my in my work I I we are working putting effort in a lot of kind of crimes normally cy cyber crimes and there is a part of my job where I I am looking for the bad guys doing crimes not just with crypto but crimes like uh selling or buying cism for example or where they are providing or doing kind of sex tortion and this kind of crimes and normally sometimes and the majority times they are paying and receiving these kind of materials by cryptocurrencies. So a part a big part of my job is is determine how how identify this this kind of malicious uh actors. And to do this we need work with in cooperation with this these partners with the the private sector where they are exchange they are custodians they are the business inside the cryptoc. So when I think about how to do to to make the the truth in this ecosystem, the crypto ecosystem growth, I I'm always thinking about how to provide safety, how to make people feel safety

and put their money in crypto. And to me, because I'm a law enforcement, this this goes through uh removing going through make effort to remove to remove the bad guys of this this uh environment. And to do this and when we do this we brings a new a new level of truth because I think I think the society be is be the society are anxious to to go into this the cryptocurrency

but a lot of people don't know how to do this safely.

Mhm.

And this is a a new case this is a kpoint.

Mhm. A few a few months ago, I received um an ask for help from a colleague and he was with a case where um a man a teacher he this teacher is he's put all his saving in crypto because he want to make more money and he start to look in Telegram how to do this And unfortunately he found a a beautiful woman and smart who could help him

and she really did and she say to him how do how put his money in crypto but also she stolen him. M

and when he did this he did this because he wanted go to the crypto ecosystem but he don't know he does not know how to do

and to me this this is why we have to to work in comparation because the the business the enterprises can provide safety to these people who

they wanted to go through through the market crypto market but they don't know how do this.

Mhm. So, it's like uh I'm a retail. I want to invest in crypto h and I I'm going to trust these banks cuz uh they also have a safe net. They have a policy enforcement, law enforcement,

h they have ways. So, if in any way got scammed, they have ways to locate the that that fund. So, yeah. Uh nice. Uh now I'm going to follow the the sequence I I I sought but now I'm going to follow.

So Veronica uh when trust uh sorry how can regulated crypto custodians enable banks to enter digital assets without needing to deeply understand blockchain technologies? Yes, it's it's actually also just complet competing on on what you were saying because exactly this is where the banks can bring the trust in. Um they are they are enabling their clients to use crypto assets just as any other asset and they also have their have the the possibility to put the same rules and the same services around it like all the other uh services that they are already offering. And um this is this is what is really beneficial then for the retail clients so that they can use that they can be sure that okay if there would be anything going wrong then there is a safety net behind that and also with that um yeah just everything around uh around it as as regulated custodians we are actually the layer the translation layer also between the blockchain technology itself and the and the banks the traditional banks so that they can then also offer their clients this um and in a trusted way because we need to make sure that we are playing by the rules. Um that we are set up in a regulated way also that we are not following any poor custody practices so that there is um any assets that is uh that is with us that we we are making sure that this is um this can never leave the place.

Nice. And uh Victor can you uh name one use case from BV bank that uh it's bringing the the the retailers or the market traditional market trust uh into the the crypto market.

Okay. All right. Uh but first of all uh it's very uh good to see here uh different perspectives of uh the trust in the market

because uh this is a such a new topic. So as a a customer I also feel uh strange I don't know uh with this kind of technology. I was talking uh with someone in the VI VIP area yesterday and I was saying oh uh I used a credit card with uh uh stable coins based on stable coins payments to uh to travel and this kind of things. uh and even understanding this market and this type of technology I felt so insecure you know so it's very important to have our public institutions uh looking for it as a bank would feel much more safer and also with providers such a good providers as crypto finance uh providing technology uh first world technology so uh it's very uh it's awesome to see this integration But uh uh you asked about a use case. So I have to bring a I don't know I have a more uh recent one and I have a more classic one.

But I will try to to talk about this both uh bang uh uh very fast. Yeah.

To uh to illustrate. But uh there's a classical problem when we buy a car from another person. And if you are Brazilian you have ever passed about this. uh I'm talking about the uh the dilemma dilemma of distrust is when you don't trust the other part that you are buying a car. So, uh, here in Brazil, we typically go to a cartial to a registration place, uh, and you, uh, transfer your car for the person that is buying your car.

Uh, and this person makes a pics or send you part of the money of this car. Uh, and you pray for God for anyone run, you know. So uh you have to uh you have to have a an intermediate person institution uh in this type of operation. Banks are often uh look for uh to be this uh intermediate of uh conf uh confidence of trust. Uh and when we are talking about the digital assets, we have the the prerogative to do this uh automatically using for example uh a smart contract to configure a DVP a delivery vest payment.

So we've made this uh for example uh in a pilot uh environment with the central bank of Brazil uh in the second phase of the DRA this Brazilian CBDC project. uh and uh not only this uh trust problem uh was issued uh in this moment but we also find uh different types of optimization of these journeys. So we have uh a lot of characteristics of this technologies that we can improve this journeys uh for example the interoperability uh reg uh between institutions so we can make things much more uh uh fast link uh and other types of benefits and this uh the the newest case uh that if you searching on Google you'll find in Portuguese is uh this is the uh in a in a in a blink uh it's the digital product passport that is already established in Europe uh and we are bringing here in Brazil not that bank is leading this project but we are uh such a huge partners with the vetri that is a a startup that we are making this uh open innovation project but also with a regulator the department of traffic from parana. So uh we basically build a passport when where we are registering uh a lot of informations from this ecosystem of mobility here in Brazil uh with manufacturers uh firms of uh insurance and banks for example it's like the open finance of uh the mobility ecosystem. So we think that we we will collect a lot of uh benefits from this use case.

Uh and the sky is is the limit. So

Mhm. So now uh in 20 minutes we know now why why is important to gain this trust what what have been done to to do that now I'd like to know the impact of that when once we achieve that. So uh in the law enforcement uh what is the which is the what are the next steps to gain this trust and and and and how can it uh helping by growing the our market the the crypto market

in my perspective I think the next steps it's dialogue because we need to be conscious we need we need truly need uh partnership between public and private sector. Many criminals are in other countries and sometimes when a law enforcement started an investigation and need information from an anime does not receive any answer. Sometimes the answer is this client it's not in your country and we need we need to change this this kind of thinking because this the our our the nature of cryptocurrencies is cross border. So if I I working to take off the bad guys from this ecosystem I will need I will need answers. I will need the the business need answer

even if they are not obligated to do this because this will be good for the environment. With this kind of information, I can take off the the bad guys who did stolen who buy material and also I will provide safety and I will provide trust to the environment. Of course there are laws and rules the enterprise need to to you know but I think if we can dialogue and if you can make and created this kind of partnership the the market just will gain and will grow because there's a lot of people that want won't go on cryptocurrencies but they don't know if they are safe enough to do this. I I I like to compare when started and when people started to use the internet and they believe internet was u no one no one could be identifier if they committed crime in internet. Now we are seeing this with cryptocurrencies and we need to

to show to the people to show the society this is not true and we can yes provide safety even if you are we are in a decentralized ecosystem.

Mhm. Sure. uh as a global market you need to be in touch with other countries and and entities right it's very important thank you and um Veronica when trust in regulated custody infrastru becomes the norm h once we achieve that how do we not not only maintain that but how is does that change the overall quality of the cry crypto market. What is the impact of now you have the the the uh traditional market trust now what sorry be be confir what what we are seeing is that the whole market is becoming much more stable and and also as previously said there is just less room for failures for poor practices. you need to be on top of your game if you really want to to be a provider in this sector and um I think it's also moving the understanding towards crypto.

So more people see now okay what is this really capable of what can we do with it um as you were just saying Maria that at the beginning many people thought okay this is like this is a new thing and nobody can really trace it back it's only for criminals now this is shifted people now understand that actually crypto is very transparent it's an auditable trace um you can see everything that is happening on the chain so it's not it's not the best place for criminals to be if they really want to use that and um and this is what what we are seeing how we are moving the market is more mature um there is also less options for actually using those weaknesses because with the regulations everybody is providing more professional services so I think what where we are moving uh where we are moving with this is that you will have crypto as just one other asset in your portfolio um where you can trust where you have the providers like the banks that you have also the safety net if anything goes wrong.

Um but hopefully with the in the future there will be less and less things going wrong.

Mhm.

Perfect. And uh Victor, in what ways does BZV believe that digital assets contribute to the real re sorry reliability of the new solutions in the market?

Okay. Uh this is a a message that I always try to pass uh when I'm talking to people about the digital assets when I'm praying the uh the fusing the the word of Satoshi. Yeah.

But uh we have five main characteristics about this type of technology. So if anything that I said today uh if you can choose something to bring home and think about it, please uh take this. Okay. So I think that everyone here already uh played with Lebu. Yeah, that uh little toy that you put your feet.

Oh Yeah. So uh I think that's a digital assets and this technology, the centralized technology, it's like a Lego play. So uh these five main pieces types of pieces of Lego in my opinion are the represent I'm going to say some tricky words. Okay. So, uh I'm sorry in advance.

So, the first one is the representativeness. It's the uh ability to represent something and we are talking about the tokenization. So, like can represent anything uh physical or virtual in a digital environment. So, this uh uh creates a lot of possibilities of user cases per se. Uh the second characteristic that I want to bring here is the uh programmability.

So this is a type of technology that allow us to make it a lot of types of uh automations uh security uh uh uh command layers you know. So security is the second piece of level here. The third piece is the interoperability. So uh uh the possibility to exchange uh data and information uh in a fluent way with other types of institutions and systems. And the fourth and the the fifth uh characteristics are quite the same but uh with some difference that is the immutability.

So what you register there is register it uh and to change this is practically impossible. And the fifth characteristic here is the traceability. So that arrives from this this part. So uh with these five pieces of Lego you can look into your business your products and rearrange them in a lot of types of ways. So I think that when we are thinking about bringing reliability to our solutions through organizations, we have to look to this characteristics of technologies and use it as ways to improve our value generation for our customers.

Mhm. That's perfect. So was exactly the time I was I was open for any final comments but I feel we have time for that. So if anyone have any final comment, any anything to say, please h be my guest and and

anything go good. Um no, I just wanted to say that I think it was actually really cool to hear the different perspectives from the different sides. Um and I it's a really good point that we need to work together um like from all from all directions and all sides and uh through that we can actually make this into a really nice future for crypto.

Yeah.

So I think that's is trust is be trustless right with many trust.

Yeah.

So I want to thank you h thank you for being here. Thank you guys for watching as well and uh yeah,

have a nice lunch.

Have a nice lunch.

Thank you.

Thank you.

Thank you. Thank you.